John Mills
Economist, entrepreneur and the Chairman and majority shareholder of JML

THE BLOG

The EU Referendum Pits Big Business Against Working People - That's Why I'm Voting 'Leave'

4.6k

10/06/2016 16:21 BST
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Updated
11/06/2017 10:12 BST

More Labour supporters than ever are choosing to vote 'Leave'.

One reason is surely because Labour people have seen multinational corporations jump to the defence of the EU, including JP Morgan, Goldman Sachs - and many other banks that crashed the economy. It is becoming clear that this EU referendum campaign is increasingly pitting the vested interests of big business against normal working people.

Why? Firstly, because the EU has helped big business pay lower wages. The free movement of people has allowed multinational companies to shift their labour-intensive operations, like manufacturing, to low-cost countries in the EU - or, more likely yet, bring in workers to the UK from elsewhere in the EU, like Romania and Bulgaria, who are willing to work for lower, and depressingly unfair, wages.

This has destroyed jobs for British people in industries like construction, manufacturing, and agricultural work. It has also surely contributed to poverty, as well as aided and abetted big business in taking advantage of desperate migrants who are often willing to work for wages that are almost impossible to live on.

The EU has also helped big businesses avoid tax. The free movement of capital makes it easy for big corporations to easily relocate their headquarters and divert profits to countries with lower tax rates, like Luxembourg. It is no surprise to see multinational corporates like Amazon, Apple iTunes, and Skype locate their corporate headquarters in Luxembourg. In fact, this has become so obvious that it doesn't even so much raise an eyebrow anymore.

The result is that these big businesses likely benefit to the tune of billions of pounds, taking valuable tax income out of the British Treasury - and your hands. This money could have been invested in important public services to help our poorest people. In this open Europe, where companies can easily funnel profits to the country with the lowest tax rate, it has also created destructive tax competition between different countries, where EU countries compete with each other in a destructive race to the bottom to reduce their Corporation Tax rates.

Perhaps the answer is to change the organisation from within? But that is not possible. Big businesses are already too ingrained in the system.

The EU's size and complexity puts big businesses and international multinationals at an advantage because they have the power and resources to lobby in Brussels. From the outside, the EU can seem inaccessible. It is almost impossible for small businesses and working people to get their voices heard. Instead, you need whole teams of people whose only job is to lobby the EU, its unelected bureaucrats, and its countless connected organisations. Almost all of the big banks and multinationals have public relations firms in Brussels who are there to do this job.

Big businesses are almost continuously lobbying the EU Commission to introduce more and more complicated and arcane rules and regulations. Day on day, the book of regulations that small businesses and workers have to obey grows larger. Big businesses are pushing for more rules because it becomes more and more costly for small business to follow them, gradually pushing them out of business or getting them tangled up in paperwork so they can't compete.

But what about the good regulations? Workers' right are critical to protect society's most vulnerable and disadvantaged people, but it is a misconception to think these come from the EU. The EU is more likely to introduce a complicated and arcane directive on the definition of a consumer or food product (like the Chocolate and Cocoa Directive), than bring in rules that actually protect workers. The majority of workers' rights existed in the UK before we joined the EU, such as equal pay, or our rules far exceed the EU's, such as the length of maternity leave.

The power that big business has to lobby the EU has been seen most recently in the TTIP deal. Discussions on this trade deal have been conducted largely behind closed doors, largely between unelected European Commissioners and big business chief executives. Because of this deal, there is now the real possibility that the EU could allow businesses to sue governments for lost profits, like they have done in Canada. This could potentially allow big businesses to force the government to privatise elements of the NHS.

This has scared Jeremy Corbyn so much that he has vowed to veto any deal. But as trade deals are decided by Qualified Majority Voting in the European Council, this isn't something he can truly promise. On top of that, many millions of pounds have been already poured into this deal, and they aren't going to walk away because Jeremy says so.

It is obvious that the EU has stacked the cards in favour of big business, and against working people. That is why all these multinationals are now fighting tooth and nail to keep us in this unfair and unequal organisation. It is also why more and more Labour voters are choosing to vote 'Leave', and take a stand against this faceless corporate bureaucracy. These people are passionate British people who want to reclaim Britain and the progressive ideals and values it has defended for centuries.